tv Street Smart with Trish Regan and Adam Johnson Bloomberg April 21, 2014 3:00pm-5:01pm EDT
idea and remind themselves of the fundamental strength of these companies, we will see more strength. if you're long on them, not short. "on the markets" again in 30 minutes. "street smart" is next. >> stocks rising for a fifth day, the longest winning streak for the s&p 500 this year. earnings season gets into full swing. smart" starts right now. welcome to the most important hour of the session. especially edition of "street smart," examining the growth of the marijuana industry and its future. an epic week for our streaming
future. netflix earnings out after the bell. aereo going to court. we have full coverage. we want to go to julie hyman keeping an eye on stocks. >> we have to start with ford because we have latebreaking news. people familiar with the company telling us mark fields could be named c.e.o. to replace alan mulally and ford would reveal win mulally would be stepping down. that could happen before the end of the year. the announcement on the appointment may come as soon as may 1. you see stock reaction. the stock heading down a little but now little changed. he had been widely anticipated to be named the successor to malawi -- mulally. we are watching a merger that may or may not happen in the gold industry. we have seen gold pullback. they have been in talks.
those have broken down over the spinoff of several mines in australia and new zealand. becauseld resume talks all other terms have been agreed to, including a 13% premium. kechers, news related to the boston marathon. is winner, meb keflezighi, an endorser. the fact he won the race is giving shares a boost today. his are up about 2.5% after win. >> time for our big story. are both beingix tested this week. aereo is in a fight for its life at the supreme court. netflix is alive and well. take a look at the chart.
plungingee shares almost 22% in the last six weeks. joining me with more on these , apanies, paul sweeney cyclical analyst, and jon erlichman. netflix has committed billions of dollars from movies and shows. can it offset some costs? this quarter is going to be very important for netflix to demonstrate it can sustain subscriber growth we have seen. the single most important metric investors watch is subscriber growth. >> that is the revenue source that helps to offset new content. you need new content to get new subscribers. >> it is what netflix calls the virtuous circle. you need subscribers to generate
cash to buy programming to attract more subscribers. as long as that virtuous circle is working, the stock continues to work. >> do they have the virtuous circle going? what else is in the pipeline to get people excited? >> i think they are working on interesting stuff. they don't share numbers on what the shows are getting in terms of eyeballs. i think what makes others potentially jealous of what netflix has been able to do is to the point about getting subscribers and building this business around the globe. we are in the middle of watching a major merger in the cable business. they can only focus on people in this country. paying $8n get people a month around the planet. >> you have to get countries to give you the rights to this. >> absolutely. they work on that. there are costs opening in new markets. they wantx they don't want --
they don't want to be in markets where there are high levels of piracy. >> are they doing enough on the international front to help subscriber growth? >> the real stories on the international side where they are approaching a sustainable run rate of 2 million subscribers. they have it to about 1.6 million, about 60% year on year growth. ago, investors were discounting the international story. i think that is no longer the case. the international business is gaining traction. look for a major expansion announcement in europe. the international story is coming together faster than i would have thought. >> netflix earnings are out after the bell. hopefully we'll will get more insight into subscriber growth. i want to talk about aereo. the supreme court will be hearing oral arguments in a case that could kill its future. what is the legal issue the court will be deciding? sam explains. listen to this.
>> by now, you may heard about aereo. launched in 2012 and backed by barry diller, it allows you to watch broadcast t.v. over the internet. is aereo legal? in 13 cities, aereo has created antenna farms, warehouses full of dime sized antennas that work like the rabbit ears you would attach to your television at home. they receive free signals from broadcasters like abc, cbs, nbc, and fox. aereo takes that signal and resends it to subscribers via the internet. you can watch live t.v. on your computer, tablet, and smartphone. aereo will even let you record shows to the cloud for later viewing. the service costs $8 or $12 a month. before aereo, there were three ways to watch broadcast television. you could both an antenna to your roof or t.v. and get it for free.
you to pay a cable or satellite company for a dish. while you are paying cable and sadly companies, they are paying broadcasters to retransmit programming to the tune of about $4 billion a year. do you know how much aereo pays broadcast networks? zilch. it argues it is pulling down the same free signal anyone can get with their own antenna. effect the antennas happen to be in a warehouse and not on subscribers roofs should not matter. broadcasters say aereo is no different from a cable company. in 2012, they sued aereo for violating copyright law. the lawsuit hinges on one thing, whether or not aereo's retransmission is considered a public performance. if it is, aereo is infringing because they have not paid for the programming like cable companies. if the court decides aereo's service is a lot of private performances, it would not be an
infringement and aereo would not need to pay the broadcasters. both the lower and appellate courts have sided with aereo. now it is up to the supreme court to decide. arguments will be in april and there will be a ruling by july. >> the big question is, is aereo within legal grounds? is it taking advantage of old laws and manipulating them in a new way? >> i'm fascinated by this case. i think this is probably going to be the most important legal in the decade i have covered the television industry. i think aereo has the momentum. if you look at legal arguments on both sides and go back to the decision in 2008, it would appear to favor aereo. broadcasters have a compelling argument on the other side. i can't imagine what would happen if the supreme court came down on the side of aereo. >> if the supreme court sides
with aereo, it leaves the ofadcasters in a position not working hard to create content if someone else will benefit. >> broadcasters are at risk. they risk the affiliate revenue, over $4 billion this year growing at 30% a year. --y run the risk of getting losing distribution. >> if aereo it is allowed to continue, could you not foresee a situation where the broadcasters get together and say let's put all our content online for free as well? how is it fair aereo is benefiting? not for free, but for a fee. c.e.o.'s hasd fox said we may create a cable network ourselves. >> one thing important to highlight, when we have spoken
he hasaereo c.e.o., noted a lot of people who use the service already have cable. they will use it in another room because they do not want to pay for another cable box. the fees the broadcasters are getting are going up by 30% a year. the bigger issue is at some point when your cable package is out of control because the broadcasters are going to be able to continue to charge more to the pay-tv providers, something is going to give. this becomes almost a story in a larger story. successful, you have to ask at what point the consumer says enough is enough. >> senator mccain has been pushing for the à la carte option where people can select exactly what they want in their cable package. might we go to that kind of system? >> i think it is literally
heading toward that, especially if aereo were to win the case, you could see and unbundled world of channels. i cannot imagine any of the options the broadcasters have put forward as alternatives that would be good for the ecosystem. they would upend the entire television ecosystem launching streaming options or sports leagues will have something to say about that. may be launching new channels. >> if the court does rule in the broadcasters' favor in this case, might we still see consumers start to get more selective and say i do not want all this content the cable companies are forcing me to take? >> t.v. bundles are the greatest thing for the media sector because everybody makes money. the only people that don't like the bundle might be consumers
concerned about their bills rising. if there's going to be any impetus to break this bundle, it has to come from consumers saying i don't want to pay anymore. broadcasters are part of the cost increase. >> that is what aereo has tapped into. >> that is the core of their argument, the pro-consumer applications. >> we will be following this closely. coming up, we are going in the weeds examining every angle of the pot business and the politics. theill even had to uruguay, first country to fully legalizing the substance this month. i will be right back after this. ♪
in 21 states and the district of columbia. if you are a small business trying to accommodate demand, there is one thing you cannot get. a bank to take your money. legalana is not federally so the banking industry has been hesitant to provide services even after the enforcement network said legal distributors can secure loans and set up checking and saving accounts at major banks. i'm joined by the owner of a marijuana dispensary called denver relief in colorado. good to see you. ask you about your own personal expense with banking. how is challenging is it for owners to get a bank account in colorado right now? >> thank you for having me. good to see you. it is very difficult. had a bank account for the first four years it was in business.
since then, we have lost three bank accounts over the past year and a half. last week, we were told we would be receiving a letter in the next couple of weeks giving us 45 days to find another bank. we are in full compliance with state laws. we are open about what we do. banking is a primary problem for us in the cannabis business. >> you have the department of justice and treasury saying we're going to make it all right. we're going to tell banks it is ok to service customers in the business. it is one thing for them to say that. it is another for banks to go along with it. at the end of the day, aren't these banks worried the government could change its mind? fundamentally, there is an issue banking what is federally illegal. >> that is right.
february when in the treasury and u.s. attorney general came out with language telling the banking industry they were going to be ok to bank with us. it was not clear enough language for the colorado bankers association. they called it a red light saying it was not clear action giving them the authority to give us the ability to bank. in the meantime, we are still dealing in large amounts of cash. it is a security issue. is a public safety issue. banking so we to can operate like any other business. >> this may be the fundamental problem in colorado. the same will happen in washington. if you don't have a mechanism in place to legitimize the industry, how is it ever going to become legitimate? >> you are right. there are a lot of problems. we had the high
times cannabis cup. denver relief won second place. >> congratulations. >> thank you. it was awesome to take on this medallion. there were 35,000 people over two days that came from all over the world to experience the industry. that was just at the cannabis cup. we have close to 100,000 people at the rally downtown. nobody got hurt. there were less than 20 people arrested for public intoxication. alcohol was served for the first time ever. it is a real industry. it is not going away. we have seen the numbers in the retail industry in the first couple of months and colorado with millions of dollars going straight into tax revenues to build public schools. it is a real industry. until we have access to banking and campaign normal taxes, there are going to be problems for the industry and operators and
services. >> you own denver relief. congratulations again on the award. you also own a consulting company trying to help businesses setting up across the country in this field. is this a similar issue you hear about over and over again, the banking problem? not just in colorado but anywhere else where someone might be trying to operate a medicinal clinic? >> absolutely. we operate denver relief consulting. we have 36 active clients in nine states and d.c. we are also operating in canada. emerging,es just massachusetts just awarded licenses. connecticut just awarded licenses. a one-way and nevada are in the noisess --: weigh -- illi and nevada are going through the application phase.
until we see something on the federal level, that will be an issue. we are hearing clients in some states like nevada where families have been around for decades and have had big casino businesses, where they have had a relationship with a bank, those individuals and businesses are going to be more privy to capital,cess to banks, and things as small businesses we don't have. >> thank you very much. the issue of pot legalization is global. next, we are heading to uruguay, the first country to fully legalize the substance. a politician behind legalization is joining me. we will be back after this. ♪
>> time for today's global outlook. america is making marijuana legal one state at a time. in december, uruguay became the first country to legalize it. anyone over the age of 18 can purchase 30 grams a month. individuals can grow up to six plants at home. it begins in uruguay this month. for more on how does going, i am joined by bloomberg's latin american reporter. how did this come about? how did the president wind up pushing this through? why was there so much public favoritism of this? >> the president wants to combat narco trafficking. the marijuana industry in uruguay is about $33 million. it is a small country of 3
million people. that is about one percentage point of gdp. if they could control that, that would be a nice win the government. he sees this as a way to fight crime. >> it is expected to be in limited next month? >> they are still debating the details of regulation, for example what you need to be a distributor. for now, you can grow up to six trees and nobody is going to arrest you. >> what about visiting uruguay? is it only for citizens? >> it is supposed to be for citizens but that may be up for debate. there is concern if they block foreigners from buying it, a black market may develop. >> he has a reputation for being progressive and libertarian on issues. uruguay has a historically progressive view. they legalized abortion and
>> midterm elections are just around the corner. pot has the potential to change the landscape. some states have been working to make it a ballot initiative, a move that could encourage millions of likely democratic voters to show up. one politician who knows what it is like to be in front of the movement is gavin newsom. as mayor of san francisco, he was the first to support gay marriage. as lieutenant governor of california, he is supporting recreational marijuana legalization. he joins me now. welcome. similarities do you see
behind the gay marriage movement, which you were an early supporter of, anti-marijuana movement now -- and the marijuana movement now? >> i guess the biggest thing is politicians saying one thing in public and a different thing in private. i think you're getting to the point where they will not reconcile anymore. i think the courage is commensurate with public opinion. politicians will start to say publicly what they are saying privately once public opinion turns in their favor. unfortunately that is what is happening. i say unfortunately because i demand courage and leadership, politicians. it will catchally up with the public and that is leading reforms. >> in an ideal world, politicians are helping to lead the public forward. this may be a situation where the public is leaving the politicians. some say marijuana has the
potential to be the democratic party's version of gay marriage. in other words, if you think about gay marriage, it incentivized a lot of republicans to go to the voting booth to vote no. in this case, it is expected a lot of democrats may flock to the voting booths to vote yes for legalization. do you think it has the potentia to shift the landscape on a state-by-state basis? >> i hope it is not just the democratic party. i hope people of all political stripes see we can do things better. you are seeing that with rand paul, even with governors. rick perry has been saying remarkable things about prison reform and has the courage to stand out from his republican colleagues on the issue of marijuana. i think you will start seeing this breaking across the board
for a fundamental reason. the millennial generation do not get this. they do not understand why we are incarcerating people for personal possession of marijuana. they don't understand why we're spending the money on incarceration costs, court time, police overtime. they don't see the wisdom of these things. from a conservative perspective, you can argue against it. from a libertarian and democratic party perspective in addressing the war on drugs, i think you can see these parties and ideologies begin to merge. making,e point you're we spend $10 billion a year trying to police this. obviously, it is not working. what else can we be doing with that money? what should we be doing in the event this becomes legal? >> you can reinvest in prevention, alternatives to
incarceration. we can reduce prison and jail populations, reduce overtime costs to law enforcement so they can spend more time and resources to focus on violent crimes. we can make communities safer. we can get our arms around a system where drug dealers are nefarious. they don't care about the future generations. we can begin to regulate it. we can begin to address the concerns we all have. i am a parent. we all have concerns about children using and abusing drugs. we can address mental health and begin to reinvest dollars there. there are wonderful ways to invest the money and the taxes generated from legalization. clearly doing what we're doing and expecting anything different is hitting your head against the wall. >> i am a parent as well. i think any parent would tell you they do not want their children abusing any substance.
there was a study out of northwestern recently that recreational users of marijuana saying it does have an effect on young brains. do you think there is an opportunity to better regulate the industry so you hopefully are not seeing the 18-year-olds and those younger using marijuana? >> think the most preposterous agument is if we move to regulatory environment, somehow we are condoning use. it is denying the reality that exists today. with few exceptions, everyone watching this nose within an hour they can probably get the drug. every young person knows that as well. in many ways, it is more difficult for teenagers to get beer or alcohol than marijuana. let's acknowledge the failure of the status quo. let's begin to orient a strategy where we are educating people,
dealing with addiction, focusing on alternative incarceration strategies. looking at this not as a criminal justice but health problem. reducing the burden of trying to incarcerate our way to a drug-free society, and acknowledge a drug-free society is not in the cards. it never has been in the history of human existence and most likely never will. let's deal with the pragmatism and reality of the world today in a more enlightened way. >> would you say to those there is the slippery slope argument at stake? if you allow this, what next? do we need one more drug? >> i remember the slippery slope arguments when i was one of the few folks on the issue of marriage equality. i honestly had a serious person on a well-known show say, are you going to allow watermelons to marry bananas?
it was outrageous and demeaning to same-sex couples. arguing for regulation of marijuana. i am arguing for moving it from schedule one drugs alongside lsd and heroin. says itral government is more problematic than methamphetamine and cocaine is safer than marijuana. the whole thing is observed -- absurd. politicians need to have the courage of their convictions and remind themselves we are not here to take care of ourselves and our careers, but to take care of the people who entrusted us in the position of public service. it is time to be honest and lead in a world where we desperately need leadership. >> california had the opportunity to pass this before. it did not succeed. what are you seeing on the ground in terms of voters and
whether that might change? >> we succeeded in failing in this respect. we used the initiative to educate the public. not just in california but across the nation. in many ways, california that led in medical marijuana, to try to lead with legalization opened the door wider for colorado, washington, and the debates in alaska and elsewhere. i think we learned of the mistake of that initiative as it relates to how it was drafted. which have the ultimate, is evidence. we are not just dealing with it ideologically. evidence is coming in every day from colorado and soon washington so we can make adjustments on the initiatives that end up on the ballots across the country. >> we will leave it there. thank you for joining me.
>> the marijuana business is booming. there are limited options to capitalize on the growth. inexperienced investors are getting fleeced by stocks posing as we'd companies. the problem has gotten so bad they have warned investors about possible stock scams. joining me is the senior vice president for investor education. what is going on?
think about some of these stocks. let me show you some charts. nearly 420% in the last six months. i think we can show you cannabis science. hascal marijuana inc. gained more than 60%. none of these companies seem to be doing anything at or making money, the clearly investors are enthusiastic. what is going on? >> there has been a lot of focus on medical marijuana and marijuana being available for recreational use. as a result, this is a new sector. people are thinking if i can just get in, i can make my millions. we are seeing a lot of investor interest. >> what do investors need to know? >> the most important thing is any time there is a new sector opening up, be cautious.
look at where the stock trades, especially if it does not trade on a national exchange. that means there's not a lot of information about the company. thoroughly check out the company and individual touting it. you especially want to pay attention to the financials filed with the sec and how they stack up with the touts your hearing on the internet. >> a penny stock, should that be a red flag? the fact this is not trading in numbers that are dollars? is that something investors should be careful of? >> that is a warning sign. penny stocks are risky. they tend to be thinly regulated and traded. often they are not companies that file reports with the securities and exchange
commission. when you file reports, you're getting audited financial statements. that gives you one more layer of protection. >> can you misrepresent stocks? can they say they are doing something when they are not? >> what is interesting is the difference between what you see in the filings even for some of the penny stocks that have been seeing sharp increases and falls. they say they are development stage company. they say they don't have products, services, or distribution channels. they say they are just starting. about somets companies would lead you to believe otherwise. that is why we tell investors you have to do your homework. not only about the company but also the individual telling you that you should invest. is it an internet campaign thend the companies,
excitement people feel because they want to be invested in the marijuana business? >> marijuana in the title or they have shifted from one business model to another. that is something we see a lot in these kinds of potential market manipulations or scams. company was involved in gambling in nevada and then turned to precious metal mining, and then was in nutraceuticals, and now is in marijuana. four different business lines, five years. that kind of thing is a red flag. >> that would raise an eyebrow. thank you. we appreciate you being here. kfc is bringing back a fan favorite. it broke records for the company in its first month on the menu. is there still appeal for the double down? ♪
>> food costs are rising. but chicken is still a relative bargain. kfc is bringing back the double down. i am joined by julie hyman. matt miller is apparently making his way there. he wants to taste this and give it his review. what is going on? no bread? >> just fried chicken where you normally would have the bread. they brought this out in 2010. apparently, did very well. the owner said they sold 10 million sandwiches the first month. there was relatively high demand. it is being reintroduced today and will last through may 25. i did some institutional research. it appears it has 540 calories, 32 grams of fat, 1380 milligrams
of sodium. calories.ot that many >> it is comparable with a big mac. matt had one for lunch. we have some other ones here. >> only 540 calories? >> do you feel better? >> yeah, that is nothing. >> there is the complete your hands get messy because there is no bread -- there is the complaint your hands get messy because there is no bread. >> we have been talking about it for a while. i thought it would be this massive, disgusting bomb. but it is not. it is a chicken sandwich with no bun. i wish they would make it like a regular chicken sandwich. want to hold it? >> that's ok. >> it does have this pocket. trends is part of the
where chicken is kind of the hot item on menus. burger king just introduced the big king. you can get it with the chicken option. domino's has introduced specialty chicken bites with pizza toppings. food costs are rising. chicken is still cheaper on a relative basis. >> if you like your are getting a bargain because you get two pieces of chicken -- you feel like you are getting a bargain because you get two chicken -- pieces of chicken. >> it is not that good. i like the original recipe fried chicken. >> his hands are messy. >> everything is messy. >> thank you, matt. >> my pleasure. the second one i have had today. >> the close of trading is next
>> "street smart" is heading into the close. we have markets moving higher. tesla is at 3%. elon musk says he expects to have chinese production up and running in the next four years. the company is planning on building a big network of battery charging stations. the company is beginning to deliver vehicles to the country. greenwich, connecticut, this morning where they had six stations. it said tesla vehicles only. >> rich people love tesla.
nine, down 1%. shoemakers largest has offered to raise worker salaries and increase benefits in a bid to end a strike that has disrupted output for six days. the company said it was willing to raise wages in factories by $37 a month starting may 1. i'm going to try to buy a shoe made by americans in the u.s. i feel that would be a more humane thing. >> advanced micro devices is rising more than 10%. it rose earlier as much as 14%. first-quarter sales last week fell in line with estimates amid a weakening market. seven, both in the
green today. talks withheld astrazeneca about a possible buyout. we will have more on this story in today's roundup. >> charter up 5%. they are said to be discussing the sale of 5 million subscribers to charter for $20 billion. comcast said it expects to receive $18 billion for 3 million subscribers. >> number five is down 5%. the company fell the most in three months after an analyst said the retailer did not provide a clear strategy to improve sales. lulu has been trying to bring back customers after the recall of transparent pants. they have a new c.e.o.. there tried to turn things around. sterne agee thinks they are not doing enough. >> number four, shall we move on? >> there are so many things i
could say about being too transparent. >> google down 1.5%. it is looking to expand further into new york city. google is looking for a space that would hold 3000 employees and plans to lease as much as 600,000 square feet. chers up almost 1.5%. the shoemaker rose after endorser meb keflezighi won the boston marathon. race in two the hours and eight minutes. she is the first american to win the race since 1983. >> facebook is up almost 4%. facebook is set to unveil in mobile app network by the end of the month. it is said to pitch the ads to developers harnessing the
>> are number one stock of the day is forward. he is scheduled to replace alan 1.ally as soon as may >> the departure date is still unclear. the announcement date is may 1. >> he has been expected to take that spot. mark fields was the name most talked about. you can see we have the fifth day in a row of gains. this is the best we have seen the market in terms of days of gains so far this year. we do have a lot of earnings coming out this week. we have facebook, apple, and we have netflix. jon erlichman will be joining us with the netflix numbers. let's get to this market. that we haderesting
an extension of last week's gains today. it look like we were not going to rise. we had continuing earnings helping matters. deals that may or may not be happening, we will talk about those in a minute. that seems to be boosting sentiment. you are talking about an extension of gains, but not huge once. health care is the best performing group in today's session. >> it is time for the roundup. matt and julie are here. i am taking it off your today with one of the most promising experiments in wearable technology. it seems to be wavering. we are talking about the wrist-based fitness computer. nike had laid off its engineering staff working on the project.
nike said it would continue to support the newest model, but acknowledged a small number of layoffs. it does not sound like this is going to be the big momentum play or product for this company that some people thought. quick sad -- >> sad. looks rather than how telling you how far you have gone, there is a point system. >> no one understands and no one cares about, basically. was onrketing professor bloomberg earlier today and he was saying the wearables will have much long-term traction. the phone is going to do everything anyway. looks the phone has been getting -- >> the phone has been getting rid of everything else anyway. board at nike the
and he has been on the board for almost a decade. there is probably an arrangement between these two companies. let's do the hardware and you can help us with the software. >> i just got a new phone. >> that is not wearable. >> it does all of those things. >> it is your life, right there. >> netflix earnings are out. profit came out with that pleased wall street. $.86 per share. they beat by him nickel. revenue -- they beat by him nickel. nickel. $1.12 is the estimate for the second quarter versus one dollar. it lookstalking about,
like 1.24 billion in revenue from their business at home. $835 million coming from abroad. wall street was looking for 1.3 billion total, so that is a huge revenue forecast upside story. a lot of it has to do with international. this quarter and next quarter, the story of the number of people adding internationally higher than wall street thought. >> up three percent in after-hours. this is a stock that has gotten , 25% in the last month and a half. it does not seem like this will that.ugh to really shift >> look, they have more than 48 million subscribers around the world. the ceo of the company said last
year, if you are buying our stock, chillax. we do not know what your expectations are. our expectations are to build the business. we will play with the pricing revenue to thee coffers. you are looking at a continued growth story for this company. it is gravy when you bring the subscribers in. >> i alluded to this earlier today when we talked about sentiment boosting stocks today. two expected corporate mergers might be hitting the skids. buyer in talks to astrazeneca. the talks have gone dormant. the world's biggest gold mining
companies, talks broke down three days ago amid minor disagreements. ofy were over getting rid various properties in australia and new zealand. today was a self-imposed deadline and they could not come together so they decided to put the talks on hold. >> both of these deals are at different ends of the spectrum. in the form a case, it would be the biggest pharma deal ever -- in the pharma case, it would be the biggest deal ever. in the gold case, they have been talking about it for 20 years, these two companies, and they it.going to do they wanted to hurry it up because they have annual meetings in the next two weeks. >> the pfizer-astrazeneca situation is unusual because a lot of the hot deals are to acquire colonial -- cool new drugs. part of it has to do with pfizer
looking to spend its money abroad so as not to have to spend dollars in the u.s. and pay taxes on them. they buyr point, if astrazeneca, they could become a u.k. corporation and not have to pay american rates for taxes. >> sad that we are incentivizing people to incorporate elsewhere. >> agreed. -- the scienceat behind everything from magnets 45 millionring, dollars, that was the price tag they got. it is an 82% loss. the buyer was the owner of the infospace search business. it did not work out for discovery. i check it out on occasion, on
the web and the podcast. >> infospace? >> they are a much smaller company. this matters to them because if they get this wrong, they are in trouble. >> this is nothing for them. >> it was a tiny -- >> every four or five years, somebody else buys them. >> you can also get so much free content from "how stuff works." >> discovery is still going to do advertising even though they will not own it. >> how that works. >> the happiest place on earth just got a little bit happier. disney has started to raise starting pay at its florida theme park.
disney presented the proposal yesterday to a consortium of six labor groups which represent more than 30,000 employees at disney world. i was surprised by that. everyone is so happy and so nice. i thought they were making four times that. who are so happy and nice are not the starting pay people. >> i am sure you have all waited in line at disney, right? >> there is nothing that can make that fun. >> the lines removed remarkable -- remarkably well. the tsa could take lessons from disney employees. >> the tsa could take lessons from anyone on the planet. >> the difference would be five or 10% of their profits. you will see if they raise prices for customers going
forward to make up for that. are we just going to be paying the difference? >> probably. >> i worry about the faerie dust. do they get that for free? >> those who like kosher hot dog should take note of this recall. recalled some of their classic wieners. customers noticed a cheese dog and what should've been a package of classic wieners. the usda likes to keep its classic wieners cheese free. >> this company is in a little trouble. >> you can put cheese on your wiener, but you do not want cheese in your wiener. that is the story. , march 2 andous
march 3, those are the days this particular stuff was produced. what was everybody else eating? year, the usda had 75 different food recalls. this is one of many recalls that will happen. nobody knows what they are eating. bite intote when you a classic wiener. >> thank you very much. we have a little debate on our hands. his legalizing marijuana a strong moral source of income for the united states? some major news from the second-largest u.s. automaker. ♪
>> the month of january brought colorado 14 million dollars in tax to marijuana sales, a promising sign that legalization could be a strong source of income for states. -- is thed economic cold economics blurring our vision of what should be an ethical issue? the bill tooppose decriminalize marijuana in his date. a professor of harvard university, the author of the influential research on the economics of legal marijuana. professor, you have done a lot of research into what legal recreational marijuana would mean for states federal tax revenue. we are looking at $3.5 million that was gained in tax revenue in colorado in a single month. do you anticipate that number will grow larger? wille colorado number
certainly go up a bit in the short term. reasons whyrious the january number might have overstated it. if more states legalize, there will be more competition for that marijuana and the ability of any one state to set a high tax rate might face some limits. the other risk is the federal government, at some point, changes its mind about the itrent hands-off approach has taken in colorado so far and start interfering and enforcing the federal law and most of the market will go back underground. been onesor, that has of the concerns. when you look at the banking issues going on and no bank will take on these dispensary owners because there is this worry the government could change its position. back to how much potential there
is, you mentioned competition from neighboring states, colorado has a 25% tax on recreational use. the would become lower if state next-door decided to allow recreational use? >> i think it is likely. we do not know for sure. it has limited the ability of any given state that wanted to tax tobacco or cigarettes at a high rate from doing so. something willly limit how much revenue there is. >> before i get to representative harris, what is your estimate of what legal marijuana for recreational purposes would bring in on a federal basis for tax revenue? done in the were
most simple complete way, if marijuana were legal federally, combine state and federal, there is potential for something like $10 billion per year. tore is also potential reduce expenditure on police, prosecutors, prisons, and so on so the net effect overall on the aggregate u.s. budget is probably $20 billion a year. >> $20 billion a year that we do not have right now. representative harris, you made the argument that this is just not worth it. why? but i think that is incorrect. any believe that you will save money on lawn forstmann and drug rehabilitation just is not borne out. more people use drugs when you legalize marijuana. more people have rehabilitation, most of that paid by the government.
if you want to raise revenues, there are other ways to raise revenues. we have not even talked about the effect on the economy and the workplace. we need a skilled workplace in the 21st century. >> you think it will cost us more? >> overall, it will cost you more. you may get some tax revenue, but you will pay way more in terms of what you are doing for law enforcement and drug rehabilitation. the adverse affect on the american workforce, most importantly. >> what would you say in response to that? >> i agree that we should look not just at the tax revenue. that is only one small part. i disagree quite strongly about the claims the congressman made about the effect of legalizing. the evidence suggests the vast
majority of people use legal marijuana, they do not harm anyone. they do not need treatment and they do not cause more accidents in the workplace. increase inay be an use, but the evidence does not remotely support the claims of these negatives from the use that exist right now. >> the incidence of accidents goes up, driving accidents. , the number of people of treatment went up. the claimve done -- about accidents, let's take that. evidence shows that in places that have diminished penalties against marijuana, there was a modest increase in the use of marijuana, a decrease in the use of alcohol and a reduction in traffic fatalities. it is consistent with lots of that saysence
marijuana makes you drive a little bit worse, alcohol makes you drive much worse. >> in maryland, our shock trauma statistics are that 26% of people who come and associate it with an accident had detectable .arijuana in their blood it is clearly associated with traffic accidents and we do not have enough data to know what widespread decriminalization will do. i think we are jumping the gun to say we have the data to answer the question. >> hang on, representative. jeff, what was the actual result of the study in portugal? >> they looked at -- looked at what happened to use rates and what happened to , and theyde effects
basically found very little change in use rate. some particular drugs went a little up and some went down. decreases inanges, things like hiv. the congressman is right, we do not have perfect data. there decreases in thingsdefault. we know that lots of really bad things happen with prohibition. the fact that we do not know for sure does not mean what we are currently doing is better. >> representative harris, what haveur biggest fear? >> we not even gone to the scientific is nothing that says the current policy should be the evidence. even with casual use among teenagers and young adults, you have permanent changes in areas of the brain. these are permanent physical changes.
many reasons, we should go very carefully into changing the current laws. what, maybe we should see happens in colorado and what happens in washington before we attempt to make this widespread. >> gentlemen, thank you very much. interesting and provocative debate. we are going to be back with more street smart] this. ♪
>> months after colorado opened its doors to legalize recreational marijuana, crowds are gathering at events like the cannabis cup. we just talked earlier with the guy who won the award. they used to be held in the netherlands. now it is being held and laces like colorado and washington -- held in places like colorado and washington. recreationalulated marijuana is coming to washington state as well. which state or states will be
next? joining me now, drug policy alliance executive director. >> we are heavily involved. oregon will be on the ballot in november. over 60% of the public says it is time to legalize the stuff. alaska is on the ballot this year. d.c., there is some movement to get the issue on the ballot. .hey have medical there is a movement by local activists to fully legalize it. >> i was just talking earlier with lieutenant governor of california who was at the forefront of the gay marriage issue. has been pushing for the
legalization of recreational marijuana and he said public sentiment is shifting so much. you would like to see your politicians leading the way, but in this case, you see the public leading the politicians. when you think about d.c., it is such a political place. some of these other places up for grabs, what is the sort of politics of the situation? public support for legalizing medical marijuana. you cannot get congress to move. >> they are scared. >> they are not scared. there is an ideological resistance among some hard-core elements of the republican party that i blocked it. -- that have blocked it. .> and yet they are resisting >> florida will have a medical marijuana initiative on the
ballot this year. all of the polls show over 60%. the ur lucky if you can get a governor to lean on an issue -- but you are lucky if you can get a governor to lean on an issue like this. all of the polls show over 60% support it so far. that would make it the first day in the south to legalize medical marijuana. >> i was in florida over the weekend and i saw quite a few anti-pot bumper stickers. it really has started to light up both sides of the aisle. >> i think we will see a lot of people turning out. we were going to wait on the legalization efforts until 2016. that is when you get more young people turning out to vote. a 10 point jump in public support for legalizing marijuana between the fall of 2012 and the fall of 2013.
2016, that will be half a dozen states. >> do you run a risk if it does not get through? what is your downside? >> you lose a little momentum. in public is so strongly favor right now, look at the polling and the demographic shift, or it is mostly elderly people who are opposed. my biggest fear are things like for the people who will pay for these efforts, you are in a moment where the people who have been paying for the legalization of marijuana were people who cared about this. and now there are people making money from the industry. they are not quite yet ready to pay for the clinical change. .- political change we may be in a tricky transitional point. ways, if you are
washington, maybe you do not want or again legalizing it because that will -- or again -- oregon legalizing it. >> a lot of business to go around. >> let me ask you, we are in a situation where we have 21 states and washington, d.c., with some form of legalization on the books. how long until we see the rest of the country or a federal law change? >> if we had a federal allen initiative process, it would be ballot -- federal initiative process, it would be changed this year. it makes me pessimistic about congress's ability to get rid of federal prohibition. >> the administration says, we will not go after banks that bank dispensary owners in colorado. >> obama and holder have shown
an element of leadership on this . look at congress, they are running from their own shadow. there is a bill in congress to repeal federal marijuana prohibition. it should be 10 times that. >> what is your analysis? after 2014, what will it look like? >> 2014, hopefully new york legalizes medical marijuana this year. florida. maybe d.c. the bigwe look for change. california will be the big kahuna. and then you will see the new england states begin to do it to the legislative process. >> pretty amazing. thank you very much. ♪talk, -- yo
legalization movement. tell us about the situation with your son. connor is almost seven years old and he was born having epilepsy and we have been out over time. he has failed every epilepsy medication. about a year ago, we sought out -- we heard about the possibility of medical marijuana. nothing else had worked. >> what the doctor say to you at the time? >> at the time -- >> did they say this is something you should consider? >> not in utah where we live. in other places, they had.
>> what did you do? thought,t point, we are we going to have to go to colorado? to have to set up some dual residency? we realized the stress being involved in doing that is the same stress that would be involved in getting a bill .assed in utah what people do not understand, what is being offered to these children, is not full on marijuana. marijuana is a slang term. it is not full cannabis. the plant that is used for the soil we are giving the kids does not contain any of the psychoactive qualities of thc.
>> you put your effort behind changing it? >> needed to educate. -- the memberouse -- i remember when th a member of the house of representatives was in my living room. we will try to rally the troops together to get a bill passed and he said, i am a doctor and i did not think they will touch it unless you have 10 years with the fda. do? are we going to --by the time >> by the time it passed, the final senator to sign off on its side, what happened here is you guys educated us to show us this is not cheech and chong for your kids. >> and your son is in a better
situation now? >> not yet. the bill just got past. in july -- a lot of this was done on faith. we have seen this happen with other children. i do not use or condone recreational use of marijuana. >> in your situation, it was a medical need. you guys are out with a new album. tell me about it. .> it is a pop record it comes from a place where i started seeking professional help to sort out some of my inner demons and ended up writing a lot of songs for this record. it ended up becoming a celebration. the album is an anthemic celebration.
>> you have been through some personal experiences as well. you both have been on the forefront of social change movement. gavin newsom has come out for the legalization of marijuana. he was front and center in gay marriage. you have been going through some personal things. finally are topics i get to openly talk about in the songs. i am happy to be 30 and gay and open about it and it is sometant as a guy that has religious qualities, there are kids in utah but are lgbt youth and it should -- and he kicked out of their homes because they are gay. if i can be any sort of a role model, it scares me to say that, at least i can be that for them. i am excited to be open and
express my feelings. >> it sounds like both of you guys are trying to your part to influence and change society. are you going to go onto our -- go on tour? >> the record comes out tomorrow and we had out in may. >> how is this different from previous albums? >> there is a cohesive nature to it. on the third record, you finally become comfortable. we are more comfortable about who we are. it is expressed in the songs. >> we were always good at being a live band. now it was time to find those -- find out who we were in the studio. >> you about all of these big hits. they have not been failures, by all means, but it is more of
a realized version of what all of that was. >> that is exciting. i am looking forward to listening to it. congrats. johnson is iny for pimm fox for the hour. >> this will be a great show. we have a perfect guest when it comes to the discussion on marijuana. stephen marley is the son of bob marley and he will talk about his new album. that is coming up at 5:00. ♪
i have actually never tried marijuana. when i first began reporting on the subject, i had very little knowledge of and little sympathy for this industry. i soon discovered the prevalence of marijuana use among normal everyday americans, the unnecessary amount of money that we spend trying to police and industry that continues to thrive and the disservice we are doing to so many by not allowing people who truly need it for debilitating and life-threatening illnesses to access it. my reporting on this topic should not be taken as glorifying the abuse of marijuana nor condoning its illegal use, but as the industry grows, more needs to be done to increase awareness of its dangers while scientifically proven to be less harmful than alcohol and tobacco, it is still a drug.
they need to make sure users are aware of its downside. locking people up is not the answer. historical and political reasons, marijuana has been subjected into a moral standards that alcohol and tobacco have managed to escape. as colorado and washington has shown, that is about to change. it will help us reallocate funds away from trying to police the substance that cannot people least to education -- that cannot be policed, to education. we will see you back here at 3:00 tomorrow. investor teamed up for the takeover of the maker of botox, shares surging in after-hours. see you tomorrow.
the hour whicht means bloomberg television is on the markets. stocks rose for a fifth straight day, the longest winning streak for the s&p since october. we put up 4/10 of a percent today, the dow jones adding 40 points. oil rose on the escalating tension in ukraine. renewed calls for u.s. sanctions against russia, which is the world's biggest energy producing country. crude, over the last year to date, up six percent.
gold fell to a two-week low. last year, we suffered -- gold --fered its worst decade in its worst drop in over a decade. this morning on "in the loop," betty liu talk to pat dorsey. he is advising against buying gold going forward. >> gold is interesting because it is one of the few assets were value depends solely on other people's opinions. you have an income stream you can value. gold has no value other than what other people want to pay for it. if you feel like you are good at guessing at what other people will pay for something, go ahead and buy gold and have fun. running arounde with wheelbarrows full of deutsche marks, stocks were
better inflation hedge than gold . >> pat dorsey says stay away from gold. adam johnson takes a look at one sector investors are already shying away from. >> from hero to zero, something crazy is happening in health care. was the best performing group in the s&p 500 last year. this year, it is struggling. it has been the single worst performer in the s&p of all 10 industry groups, down about 4.5%. bad that the percentage of stocks outperforming right now with the sector, less than 20%. that is completely oversold. everybody has been selling all of the winners from last year. happened to other times over the past year.
interesting. here is what you really want to focus on with regards to health care. the vitals looked really good, we are talking about earnings growth in 2014. people are selling all the winners of last year, but guess what. there is a good reason to be in stocks this year. you look at the 53 stocks in the s&p health-care index and try to figure out where you have earnings growth this year of at least 10% and where there is not a single sell rating. here they are. i am going to post all of these, since i went so quickly. >> more on the markets, i am matt miller.
>> this is "taking stock" for monday, april 21. i'm filling in for pimm fox. ohen joins me. a revelation, not in the biblical sense, but every guest will be revelatory. edward snowden pass rush and have sparked numerous questions around the world. we will talk to an author that took an intimate and look at him and vanity fair this month. michael king will tell us why